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S.Korea's corporate default rate jumps to two-year-high
Last Updated: 2013-10-18 13:30 | Xinhua
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Default rate of South Korean corporate bills jumped to the highest in more than two years as one of the country's conglomerates were hit hard by the liquidity crisis, central bank data showed Friday.

The default rate on corporate bills, including promissory notes and checks, came in at 0.24 percent in September, according to the Bank of Korea (BOK). The figure was the highest since 0.29 percent tallied in April 2011, and was up from 0.1 percent in the prior month.

The surge came after South Korea's 38th-largest conglomerate Tong Yang Group filed for court receivership for five of its affiliates due to liquidity shortage. The group failed to repay short-term debts worth around 110 billion won (103 million U.S. dollars) in due time.

The number of companies that went bankrupt rose 2 from a month earlier to 86 in September.

Companies, which failed to redeem promissory notes and checks, increased by 9 last month in the manufacturing sector. The figure for the service industry dropped 13, but the reading among builders increased 5.

The number of newly established firms sank 917 from a month earlier to 5,185 last month. The ratio of start-ups to company failures was 87.9 in September, down from 105.2 in the previous month.

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